Family Budget - is it really this hard?

**LittleMsMom** · 06-20-2011, 11:46 AM

These are the areas I would addres:
$ 108 car insurance (Can you price shop around for a better rate, maybe I higher deductable in exchange for a lower per month cost)

$ 106 furniture debt (Can you return this? How much longer on this debt? I would look for free or cheap furniture on craigs list or at thrift stores until you can save up enough money to buy furniture with CASH)

$ 116 phone - Vonage + 1 cell phone (You said you pay $80 for a basic cell phone) I suggest you look into pre-paid. I don't know what is available in your area but I pay $30 for Straight Talk, I know Net10 would be even cheaper but is not available in my area.

$ 40 lawn and garden (Can you do this yourself instead of paying someone?)

$ 600 groceries (Start clipping Coupons, buy the loss leaders)

$ 640 personal spending money ($80 each/week) $80 a week is $320, $160 a week is $640....Time to switch to using an envelope for your personal spending money. Once the Reduce amount is spent, no more spending.

$ 51 diapers (Depending on the age of your children, switching to cloth could be a big budget saver, along with earlier potty training, and less rashes etc.)

Your not going to be able to Zero out these costs, but here is $1661 of wiggle room.

Good Luck!!

**skydivingchic** · 06-20-2011, 11:54 AM

First off, if you are paid biweekly (as opposed to twice monthly), your monthly average take home pay is $4907.50, not $4530 since there are 2 months a year you get 3 paychecks instead of two. So, you have ~$377/month not accounted for. Where does it go?

How large is your typical tax return? If it is much over ~$1000, you need to adjust your withholdings so you can get more money each month instead of giving the government an interest free loan with each paycheck.

Yes, you need to start brown bagging your lunch. No, its not that big a deal. There are plenty of people who brown bag every day (or nearly so), DBF and myself included. $5 here and there adds up really fast.

Look at the cell phone expense. We pay less than you for 1400 minutes split between 2 cell phones (no data plan).

I hear a whole lot of justification from you regarding your spending money and the gym membership. The fact of the matter is, you already had your fun when you spent on vacations and such and charged them to the CC. You need to start making cuts in order to pay off the debt and build a cushion and these are two areas you can make substantial cuts in. Last I checked hiking and excursions to the park are free and can provide plently of family entertainment.

You didn't get into the debt overnight and you won't get out of it overnight. There are no great secrets - just spending less than you earn and sending the rest to debt until its gone. Other things you can consider is getting a second job or having your wife work while you are home (pizza delivery, retail, etc). Start selling stuff you don't need - outgrown clothes, unused sports equipment or electronics, etc. The options may not be fun, but it is worth it in the end to not have to put every little "emergency" on a CC. I'm not trying to be harsh, but absolutely nothing about your situation will change until you and your wife accept the fact that you have to make some not-so-fun changes to your lifestyle in order to get yourselves on the right path. There are lots of great people here who are perfectly willing to help and give great suggestions, but you guys are going to have to both be on board and start implementing before things change.

**bjl584** · 06-20-2011, 11:56 AM

Another suggestion would be to boost income. Does your wife work? Is it possible for you to pick up a part time job?

**Frugal** · 06-20-2011, 12:06 PM

I too would tell you to target your grocery bills. $600 for a family, while not extremely high, is not all that low, either. I would try to save money at the grocery store by using coupons and shopping each sale ad for local grocery stores each week by comparing prices. Maybe you could have your wife do this? It is not hard to get the hang of. There are easy ways to stock up on food using coupons...and I am not talking hoarding like on shows similar to Extreme Couponing, but rather moderate stocking up in moderation for basics you always need to have on hand.

Don't worry, it is possible to get by on much less than you are making, because many married couples/families do not even make HALF of what you are making, and they somehow eak by and survive. Yes, part of it is the economy, but part of it is inflation and costs are going up while no one is getting raises or COLA adjustments. Jobs are hard to come by that pay well, so everyone right now is struggling to get by with the job they have.

Like someone said above, the key really truly is to learn to get by with less than what you have and stock the extra away somewhere, while trying to pay down debt. I am in this same boat too, so don't worry, you are not alone!

Hope that helps. Maybe you guys could talk to some kind of professional financial advisor? I think they are much better at reviewing specific, detailed financial information and giving solutions tailored to each individual situation.

p.s.--You could consider getting rid of the gym membership and/or extras like Netflix or cable.

**13oXXy150urqu33n** · 06-20-2011, 12:20 PM

Thanks for the reply LittleMsMom,

1) Shopped for a better rate, this was it. I could shave off another $15 by going with the lowest rate allowed by law here, but I feel it's worth it to have one-step-up better coverage and not be financially devastated by an accident in which someone gets hurt.

2) This was the first piece of furniture we have bought in 6 years. It's a sofa we bought at the discount outlet. At 38, I was hoping my days of Goodwill sofas were over.

3) We tried pre-paid, the service was poor and no long distance.

4) The $40 is me doing the yardwork myself, we have a pool that needs chemicals, then there's the cost of paint, parts, materials, etc.

5) Groceries, I agree we could do better here in theory, but we don't buy packaged food which is what most coupons are for. Our kid has intolerances to a huge range of foods (dairy, wheat, poultry, eggs, citrus, beans, and soy - just try to put together a meal not using these ingredients) and they gouge for gluten free foods like cereal and pasta.

6) Exactly, it's $80 each per week, in cash, when it's gone, you're done.

7) We use washable cloth diapers to cut down on disposables, they cost too to buy, plus detergent, etc.

I probably sound defensive, but I am trying to explain why our expenses are what they are. While totaling these items up does equal $1661, it's not like we can eliminate them, or more to the point, I am perplexed that given my salary, these are the decision points for our life. It's not like we buy $20 wine, we buy $3 a bottle wine! I am not complaining because I can't buy grass fed beef, I buy one steak for the whole family to share, a few times a month. This gets to my point though, shouldn't someone making what I do be able to have a nice steak and a good bottle of wine at home twice a month? I am not asking for a $150 dinner at a steak house, just a nice meal at home - even this is a big splurge for us and yet we are considered upper middle class...

**MonkeyMama** · 06-20-2011, 12:49 PM

I personally support my family on about the same income.

Some obersvations:

Are you getting large tax refunds at the end of the year? If so, maybe for the best - some forced savings.

How much are you setting aside to retirement?

After retirement and health insurance (which does not come from my paycheck, but pretending that it does) leaves me about $4200 per month income, myself. For comparison.

Skimming your expenses, many are very similar. So I share just because our income/expenses run very similar.

Groceries - definitely something that can be improved. If spouse is home, spouse should make full-time job to cut down those expenses. It doesn't have to be a huge improvement overnight. I feel like our grocery bill has gone down every single year for about the last decade. We just get more efficient and better at it as time progresses. We splurge fairly often ourselves - we just don't *spend* that much.

What really jumps out at me is the debt (credit card payments) and spending money.

Work extra jobs and do whatever you need to do to get rid of the debt. Makes life SO MUCH easier not to have those payments.

Your problem is really the spending money. To me, it looks absurd. You could easily cut that way down and make some forward progress.

Attitude is everything. Though I make the same income, we made far more when we both worked (before kids). I approach these years as lean and as some of our lower-income years. Even if I lived quite well on far less before I ever married or had kids. Don't get stuck on "$80k is a good wage and we should have more." The truth is that things can be hard on any wage. & I wouldn't exactly claim that supporting a family on this income is a walk in the park, myself.

Secondly, you need to really focus on your goals and priorities. If you spend $50/month on something that REALLY means something to you - you won't miss the rest of that spending money. I can say from experience. My spouse REALLY loves his cable, and I like having someone to do the yard work. My discount gym membership is important to me. There is not a lot of other spending in our household. Having time with our kids trumps more material things. If you are struggling with that, then maybe the choice to work more is a better one for you. Because those are really your only choices. Be happy with less, or bring in more income.

"At 38, I was hoping my days of Goodwill sofas were over." Does having new furniture really add to your quality of life?? This is a perfect example of how you really need to focus on priorities.

Have you read the "Millionaire Next Door?" It would be a good read for you.

You will find it far easier when you set goals and put more purpose to your spending. For us, personally, we don't blow much money on a monthly basis, so that we do have money for electronic gadgets, vacations, etc. We also rarely buy ANYTHING new. "Barely used" is just as good, but costs a small fraction. For example, my spouse supports is elaborate video game hobby by buying and selling used games systems. (He keeps the good stuff for himself - OR uses the profits to buy other games and systems). He's got a Wii and a PS3 and all sorts of crap like that, but the money doesn't come from our single paycheck. Just a perfect example.

**13oXXy150urqu33n** · 06-20-2011, 12:58 PM

Originally posted by skydivingchic View Post

First off, if you are paid biweekly (as opposed to twice monthly), your monthly average take home pay is $4907.50, not $4530 since there are 2 months a year you get 3 paychecks instead of two. So, you have ~$377/month not accounted for. Where does it go?

How large is your typical tax return? If it is much over ~$1000, you need to adjust your withholdings so you can get more money each month instead of giving the government an interest free loan with each paycheck.

Yes, you need to start brown bagging your lunch. No, its not that big a deal. There are plenty of people who brown bag every day (or nearly so), DBF and myself included. $5 here and there adds up really fast.

Look at the cell phone expense. We pay less than you for 1400 minutes split between 2 cell phones (no data plan).

I hear a whole lot of justification from you regarding your spending money and the gym membership. The fact of the matter is, you already had your fun when you spent on vacations and such and charged them to the CC. You need to start making cuts in order to pay off the debt and build a cushion and these are two areas you can make substantial cuts in. Last I checked hiking and excursions to the park are free and can provide plently of family entertainment.

You didn't get into the debt overnight and you won't get out of it overnight. There are no great secrets - just spending less than you earn and sending the rest to debt until its gone. Other things you can consider is getting a second job or having your wife work while you are home (pizza delivery, retail, etc). Start selling stuff you don't need - outgrown clothes, unused sports equipment or electronics, etc. The options may not be fun, but it is worth it in the end to not have to put every little "emergency" on a CC. I'm not trying to be harsh, but absolutely nothing about your situation will change until you and your wife accept the fact that you have to make some not-so-fun changes to your lifestyle in order to get yourselves on the right path. There are lots of great people here who are perfectly willing to help and give great suggestions, but you guys are going to have to both be on board and start implementing before things change.

Very perceptive Skydivingchic, there are indeed two missing paychecks. They're my built-in debt pay down tools. By budgeting without them, we are not slowly sinking further into debt. You see, we bought our house back when they gave out no money down 80/20 loans. As such, we had a second mortgage at 7% for 20% of the cost of house. I moved that over to a HELOC at 4.5% back when they were handing those out in 2005, so a chunk of our mortgage payment is actually just interest on a HELOC. I use the extra paychecks to catch up on the principal on the HELOC and pay down the credit card debt that has accumulated in the six months since the last one extra paycheck. Same goes for our tax return.

As for your other comments, you are not being harsh, it's just that the choices seem harsh to me. You are telling the truth and I know it. It just seems like, having suffered through interminable PB&J's when I was a starving student getting my Ph.D., I am trying to eat healthier and with more satisfaction (I don't know if I could brown bag a large salad with chicken breast for less than the $5 I pay at the cafeteria). I suppose mostly, I am disappointed to find myself pushing 40 and finding that a sack lunch and giving up my gym membership and fitness classes is my fate. Is this really it? Is this the beginnings of a mid-life crisis? Is this how it starts?

**13oXXy150urqu33n** · 06-20-2011, 01:29 PM

Originally posted by bjl584 View Post

Another suggestion would be to boost income. Does your wife work? Is it possible for you to pick up a part time job?

My wife did work until she got pregnant with our second child. I got a raise just before she did and it compensated for the lost wages. My wife didn't exactly earn much before, especially after taking out $500 a month for day care and all the other expenses that come with having a job (work clothes, etc.) If you add to that the misery of handing your 3 month old over to someone else to care for 8 hours a day, and the guilt that comes with it, we were only too happy to have my wife stay home. Everyone is much happier with the arrangement.

I could get a part time job I suppose, but as it is, I feel like I hardly see my family. If I started to work weekends too, I would have to question what the heck I was doing any of it for.

**momcents** · 06-20-2011, 01:33 PM

You should start at your grocery bill and try to reduce that. We make a similar amount of income and I spend that and feed a family of seven on that (and that includes pets/cleaning/paper products). I don't buy prepackaged food or snacks, and my kids eat plenty of fresh fruit and veggies. I have to deal with similar allergy issues (egg and nuts), so PB&J (cheap) isn't even an option at my house.

The unaccounted for money seems to be a weight around your budget's neck. Track those funds and then make goals to reduce fromt here. Seems to me that a lack of planning and lacking a plan are really doing you in.

**humandraydel** · 06-20-2011, 04:16 PM

Originally posted by 13oXXy150urqu33n View Post

This budget is all good and well, until the water heater breaks, the car needs new brake pads, There's a hospital bill for $125 for a ER visit, I want to buy pavers for a yard improvement, we want to vacation, God forbid take my wife out for a night, fix our home computer, install a ceiling fan in our bedroom, etc., etc. These are all recent examples. All of these unbudgeted costs and more have to go to credit cards - hence our debt payments of $250 a month (last year was particularly tough as my 20 year old truck needed $1300 of repairs, and we flew the family East for vacation with the grandparents).

You want my painfully honest opinion? This paragraph (highlighting is mine) is your answer. You do NOT have an income problem, you have a spending problem.

In other words, you are doing it wrong. You don't have a budget...you have a list of everything you want to buy. Then, after you buy everything on the list, you don't have any money for saving. The correct way to do it is to sit down and figure out how much you need to SAVE every month for your long term NEEDS (retirement, car repairs/car replacement fund, new roof, house down-payment, etc.). Then, figure out how much you need to (can) spend per month on your short term needs (food, shelter, clothing, etc). Whatever is left is your WANTS money. Spend it as you please with no guilt!

For example...I VERY badly want a new computer, but I won't be getting one anytime soon. I would love to do some yard improvements, but I'm putting it off due to the cost. I've considered putting in a few ceiling fans, and I will at some point, but not now. I DID just go on vacation (spent $400) and had a blast...especially since it didn't go on the credit card!

**SeanH** · 06-20-2011, 04:43 PM

Until you breakdown your personal spending money into what it actually is, you'll never be able to figure out what is necessary and what is lumped in and extra.

I don't think its worth brooding on (as you can't escape it), but my fiance and I have almost the exact same gross income as you, but we pay $~600 less per month for housing (ie. mortgage + insurance/tax). Different circumstances (obviously you have children), but that's dollars flowing. And your square footage is 100 more ft2 than our apartment. This may just be the Texas in me, but I don't think your home is very affordable.

Regarding the extra work. I get your response, but what if you picked up some extra work entirely for the point of killing your credit card and furniture debt. Wouldn't it be worth a few months of suffering to add $350 bucks back to the budget?

The car - do you really have to buy new tires every year? Is that on one car or 2 cars?

Electric + oil/gas. This seems a little high to me. I have similar square footage, live in a very hot climate and only break $200 on electric during the hottest of months. This may just be me not appreciating how hard it is to heat a home during the winter, but could a little clothing adjustment and thermostat adjustment result in dollars saved?

Phone - I have the cheapest plan AT&T offers and its $52 - no internet. Google's phone service is free within the United States and can be done over a computer through the internet with a microphone. Skype is also very cheap/free depending on what you use it for.

Without fixating on the health club - you are paying to use both a public and a private pool?

I eat a lot myself and I only eat meats and vegetables so I know a bit about groceries. That said, when there's so little leeway, I wonder if you'd be well served learning the prices of your favorite items and looking for them. I search for $2 a pound chickens breasts, bag them individually, freeze them, and take them out 3 at a time. I've searched all the local grocery stores (HEB, Randalls, Kroger, Albertsons) and I've found shopping at the wrong place can cost you a $1 an item everytime. It shocked me at first, but some places are just cheaper on every item.

Best of luck.

**disneysteve** · 06-20-2011, 04:54 PM

I agree with the others, especially humandraydel. You make too much money to be this broke. Remember, the median household income in the US is about 50K. The fact that you are earning 64% more than that and are still struggling points to a spending problem, not an income problem. You are putting luxuries before necessities.

Sit down with your wife and make your August budget together.

Try this:
$4907 income
$1266 mortgage
$ 277 home insurance/real estate taxes
$ 250 credit car debt
$ 0 car payment
$ 108 car insurance
$ 250 gasoline (20-gallon tank a week at $3/gallon)
$ 64 car maintenance ($40 oil change every 3 months, $600 tires/year)
$ 20 car registration
$ 18 car parking permit
$ 106 furniture debt
$ 125 electricity
$ 125 gas/oil
$ 49 internet
$ 0 cable
$ 116 phone - Vonage + 1 cell phone
$ 80 water/sewer/trash
$ 40 lawn and garden
$ 90 medical
$ 40 prescriptions/vitamins/medicines
$ 187 health club/pool
$ 500 groceries
$ 50 gifts (Christmas, birthdays)
$ 500 personal spending money
$ 51 diapers
$ 11 Netflix
$ 584 savings/debt reduction

For the next 2 months, put the savings amount in a money market account and use that as your starter emergency fund so that the next time something unexpected comes along, you don't need to whip out the credit card. Once that money is in place, stop saving and put that money toward debt reduction. What is the balance and interest rate on each loan?

Notice that I did not eliminate a single luxury. I did trim back on things a bit. Certainly, there is a lot more fat that could be trimmed from this budget but try this for a month or two. If you find that it really isn't so bad, trim it back some more, directing any additional savings toward the debt. Remember, once the debt is gone, you get an immediate $356/month raise. The sooner you can make that happen, the better off you'll be.

**bennkar** · 06-20-2011, 06:18 PM

I make what you do, and have no issues. Of course I live alone, which helps alot, but still your numbers are crazy. I have commented after the items I think you need to look into...

Originally posted by 13oXXy150urqu33n View Post

Hi everyone,

I am seeking advice. Despite having what I think is a good paying job, and living in a low cost location, we are struggling every month. I am at my wit's end trying to figure out how we can do better. Please see below, I welcome comments and discussion.

I am a 38 y.o. married man, with two young children. My salary is $82,000 a year.
After Fed and state taxes, health and dental insurance, retirement, social security, Medicare, etc., my take home is $2265 every other week:

$4530 income
$1266 mortgage
$ 277 home insurance/real estate taxes >>>> Have you shopped around for other insurance quotes?
$ 250 credit car debt
$ 0 car payment
$ 108 car insurance >>>> Check for insurance competition - maybe save some here.
$ 250 gasoline (20-gallon tank a week at $3/gallon) >>>>> OK, this is just crazy. Do you have a 1 hour commute? Do you have a vehicle that gets 15 MPG? Something about this one is not right.
$ 64 car maintenance ($40 oil change every 3 months, $600 tires/year) >>>>> Just what are you doing that you blow through expensive tires so fast??? I travel 15,000/year, and my $75/ea. tires last 3-4 years.
$ 20 car registration >>>>> Monthly registration???? Is this property tax on the car? If not, just what is this?
$ 18 car parking permit
$ 106 furniture debt >>>>> Craigslist / estate sales will get you fabulous furniture for 1/2 store prices. Or learn woodworking and make your own (its what I did).
$ 125 electricity >>>>> I have 2 months that max out @ $100, just what all are you doing???
$ 125 gas/oil >>>>> Is this an average over a year? Maybe you need to add insulation?
$ 49 internet >>>>> Is there no competition for internet? Check local cable and phone companies for service. I get mine through the cable company for $25.
$ 0 cable >>>> Good call.
$ 116 phone - Vonage + 1 cell phone >>>> MagicJack is $25/year, and prepaid cell phones can be had for $10/mo. I know some people pay more, but seriously, that's way too much for phones.
$ 80 water/sewer/trash >>>>> I got mine down to less than $10/mo, but I can understand how your service could add up to $50/mo.
$ 40 lawn and garden >>>>> You can't mow your own lawn for a year or two? I got a nice used lawnmower for $20 this spring. Costs about $1 for gas each time I cut (every two weeks)
$ 90 medical >>>> Insurance premium? If so, that sounds about right.
$ 40 prescriptions/vitamins/medicines >>>> Insist on generics if applicable.
$ 187 health club/pool >>>>>> Isn't there something cheaper close by? That seems awfully expensive to me.
$ 600 groceries >>>>>> I agree its a bit high, but not terrible.
$ 100 gifts (Christmas, birthdays) >>>>>> Given you are talking about diapers, how much do you need for gifts for children? Check yard sales / Craigslist & stock up for a fraction of this amount.
$ 640 personal spending money ($80 each/week) >>>>> You need to spend $80/wk? Retail therapy?? OK, once in a while sure, but every week?
$ 51 diapers >>>> (Ever consider cloth diapers although it may be too late now.)
$ 11 Netflix >>>> You could see if Hulu gives you what you want for free, but I understand if you insist on this one.
$ 25 savings
_____
$2
Thanks for reading.

One of the things you find is my comments sound like a lot, and they are. Try one or two (or three) things first, then after a bit try another, and so on. After a while you realize its easy to save money if you just put some thought into it.

**LivingAlmostLarge** · 06-20-2011, 06:43 PM

I have 2 cell phones no internet for $80/month on ATT. Why is yours so expensive? Where are you? Honestly $80/week spending money is a lot. You should break it down into necessities and actual spending money. My DH gets $80/month for lunch out, basically once a week. That started this year, before it was $40/month.

But everything is budgeted, food for lunch and dinner, eating out, entertainment, car maintainence, etc. So it truly is fun money.

Family Budget - is it really this hard?